Financial Performance - The group's revenue for the fiscal year 2021 decreased by approximately HKD 183.4 million, or 52.4%, to about HKD 87.2 million compared to fiscal year 2020[12]. - Revenue for the year ended March 31, 2021, was HKD 87,278,000, a decrease of 52.4% from HKD 183,363,000 in 2020[193]. - Gross profit for the fiscal year 2021 was approximately HKD 39.3 million, a decrease of about HKD 27.5 million or 41.2% from fiscal year 2020[13]. - Gross profit for the same period was HKD 39,256,000, down 41.2% from HKD 66,761,000 in 2020[193]. - The company reported a net loss of approximately HKD 64,845,000 for the fiscal year ending March 31, 2021[170]. - Total annual loss was HKD 64,845,000, slightly increased from HKD 60,348,000 in 2020[193]. - The company experienced a loss of HKD 60,348,000 for the year ended March 31, 2020, which increased to HKD 64,845,000 for the year ended March 31, 2021, reflecting a worsening financial performance[196]. - The company has recognized a significant reduction in administrative expenses, which fell to HKD 32,214,000 from HKD 54,391,000 in 2020, a decrease of 40.8%[193]. - The company reported a decrease in cash and cash equivalents from HKD 4,494,000 at the beginning of the year to HKD 3,417,000 at the end of the year, indicating a reduction in liquidity[199]. Operational Challenges - The fiscal year 2021 was challenging due to social unrest in Hong Kong and the impact of COVID-19 on global production and retail, affecting both OEM and private label businesses[8]. - Revenue from OEM production continued to decline in fiscal year 2021, primarily due to the threats posed by COVID-19[11]. - Revenue from private label production also decreased in Hong Kong and China since the onset of the pandemic[11]. - The company acknowledges the ongoing impact of social unrest and the pandemic on its operations and is preparing to navigate these challenges[8]. - The outlook for the next fiscal year remains challenging due to ongoing impacts from the COVID-19 pandemic and geopolitical tensions[19]. Strategic Initiatives - The company plans to reduce costs by streamlining operations and collaborating with other manufacturers in the Asia-Pacific region to adjust production[9]. - The company aims to expand its online business significantly, investing in e-commerce platforms and partnerships with online retailers due to a shift in consumer shopping behavior from offline to online[9]. - The company will reduce physical retail stores in Hong Kong while expanding its online presence[9]. - The company is focusing on opportunities to create long-term value for shareholders despite various uncertainties and challenges faced during the year[9]. - Future plans include improving operational efficiency and implementing cost control measures to enhance core competitiveness[40]. Governance and Compliance - The company emphasizes good corporate governance to enhance shareholder value and ensure effective accountability[50]. - The company has complied with the GEM Listing Rules and corporate governance code, with regular reviews to ensure adherence[51]. - The company faced challenges in maintaining the minimum number of independent non-executive directors as per GEM Listing Rules after resignations in 2021[53]. - The company appointed Ms. Huang and Mr. Hu as independent non-executive directors on June 28, 2021, to meet compliance requirements[53]. - The company has established various committees, including the remuneration committee and audit committee, to enhance governance practices[48]. Risk Management - The company is primarily exposed to foreign exchange risk related to transactions in HKD, USD, and RMB, with potential losses of approximately HKD 0.7 million and HKD 1.5 million under a 5% fluctuation in RMB against HKD for fiscal years 2021 and 2020, respectively[36]. - The board is responsible for overseeing risk management and internal control systems, which are designed to minimize risks associated with business operations[92]. - The company has established policies and procedures for risk management and internal control, which are regularly monitored and assessed for effectiveness[92]. Shareholder Communication - The company is committed to effective communication with shareholders and has reminded directors to attend shareholder meetings[52]. - The company has adopted a dividend policy to allow shareholders to share in profits while retaining sufficient funds for future growth[102]. - The board will consider various factors, including the group's financial performance and capital expenditure needs, when deciding on dividend distribution[103]. Financial Position - Current liabilities exceeded total assets by approximately HKD 19,515,000 as of March 31, 2021[170]. - The company's equity attributable to owners was negative HKD 22,619,000, down from positive HKD 9,781,000 in 2020, indicating a decline in financial health[195]. - The group’s total liabilities increased significantly, leading to a total equity deficit of HKD 129,119,000 as of March 31, 2021[196]. - The group recorded an inventory write-down of HKD 23.5 million for the fiscal year 2021, compared to HKD 9.5 million in fiscal year 2020[14]. Management and Personnel - The company employed approximately 63 employees as of March 31, 2021, a significant decrease from 674 employees in 2020[41]. - The employer's contribution to the mandatory provident fund for the fiscal year 2021 was HKD 1.8 million, down from HKD 4.3 million in the previous fiscal year[42]. - The company has appointed Mr. Guan as the executive director since May 8, 2020, and he has over 15 years of experience in accounting and auditing[46]. - Ms. Wang has been serving as the executive director since March 17, 2021, and has been the operations manager of a listed company since May 2016[46]. Asset Management - The company sold a land parcel for RMB 11,000,000 (approximately HKD 12,287,000) on November 2020, as part of its asset management strategy[32]. - The group recorded right-of-use assets amounting to approximately HKD 6,762,000 for office spaces, warehouses, and retail stores as of March 31, 2021[177]. - The management conducted impairment assessments on all right-of-use assets in Hong Kong due to adverse impacts from the Covid-19 pandemic, deciding not to recognize any impairment losses in the current year's financial statements[180].
民信国际控股(08456) - 2021 - 年度财报